Select Committee on European Scrutiny Thirty-Ninth Report



6. EXECUTION OF CONFISCATION ORDERS

 

(23635)

9955/02

Communication from the kingdom of Denmark — Initiative by the kingdom of Denmark with a view to Council adoption of a Draft Framework Decision on the execution in the European Union of confiscation orders.

Legal base:

Articles 31(a) and 34(2)(b) EU; unanimity; consultation

   

Document originated:

14 June 2002

Deposited in Parliament:

11 July 2002

Department:

Home Office

Basis of consideration:

EM of 31 July 2002

Previous Committee Report:

None

To be discussed in Council:

No date set

Committee's assessment:

Legally and politically important

Committee's decision:

Not cleared; further information requested

 

Background

    1. The Framework Decision forms part of a programme of measures to assist in the fight against organised crime and money laundering and to implement the principle of mutual recognition of decisions in criminal matters.
    2. The draft Framework Decision

    3. Article 1 of the draft sets out the objective of the Framework Decision, which is to facilitate the recognition and execution of confiscation orders between Member States. Article 1 also provides that the Framework Decision is not to have the effect of amending the obligation to respect the fundamental rights and fundamental legal principles as enshrined in Article 6 of the Treaty on European Union.
    4. Article 2 contains definitions of key terms used in the text. Whilst, the definition of a judicial authority is to be a matter for the national law of the issuing state the definition of "confiscation" means that the penalty or measure ordered in criminal proceedings must be one made by a court. "Property" is defined as property of any description which the competent judicial authority in the issuing state considers to be the proceeds of an offence. The property used in committing an offence ('instrumentalities') appears to be excluded.
    5. Article 3 specifies the competent authorities for the issuing and execution of confiscation orders. Whilst Article 3(1) requires that the issuing authority be a court, Article 3(2) leaves it to national law to determine who shall be competent authorities for the execution of confiscation orders within their jurisdiction.
    6. Article 4 deals with the formal requirements for the validity and transmission of confiscation orders and their corresponding certificates to a Member State where the natural or legal person against whom an order has been issued is to be found. Article 5 defines the offences which, on condition that they are punishable in the issuing state by a custodial sentence of a maximum of at least three years, may give rise to execution on the basis of a confiscation order without it being necessary to satisfy any requirement of dual criminality[37]. For other offences not covered by the list given in Article 5, the executing Member State may impose a requirement of dual criminality.
    7. Article 6 is the key provision of the draft instrument. It provides that a confiscation order made in one EU Member State, and transmitted in accordance with Article 4, shall be recognised in another Member State "without any further formality" and that the competent authorities in the executing state shall "take all the necessary measures for its execution" unless the executing state invokes one of the grounds for non-recognition or non-execution of the order in Article 7. Article 6(2) allows parties[38] to agree that confiscation may take the form of a requirement to pay a sum of money corresponding to the value of the property.
    8. Article 7 details the formal and substantive reasons for non-recognition or non-execution of confiscation orders by an executing state. In addition to the case where the certificate under Article 4 is not produced, or is incomplete or has not been translated, or 'manifestly does not correspond to the order', the executing State may also refuse recognition and enforcement where another confiscation order has been issued against the same person in respect of the same acts by the executing State or any other state[39]. The executing State may also refuse recognition and enforcement in cases where dual criminality is required under Article 5(3), where there is a privilege or immunity in the executing State, or where 'third party rights under the law of the executing State make it impossible to execute the confiscation order'. Recognition and enforcement may also be refused where the order is made in criminal proceedings against a person in absentia and the person was not served with the order in person or otherwise informed of the date and place of the hearing, provided that the person has not had an opportunity to 'challenge or appeal'[40] against the order in the issuing State.
    9. Further grounds for refusing recognition and enforcement are provided for in Articles 7 (2)(f) to (h) of the proposal. Under Article 7 (2)(f) recognition and enforcement may be refused where the order relates to criminal offences which, under the law of the executing State, are regarded as having been committed wholly or partly within its territory, or which were committed outside the territory of the issuing State and the law of the executing State does not permit such extra-territories proceedings to be brought. Article 7(2)(g) permits recognition and enforcement to be refused where the judicial authorities in the executing State have decided not to institute legal proceedings in respect of the offence which forms the basis for the confiscation order[41]. The provision also permits recognition and enforcement to be refused where the person has had 'another final judgment delivered against him in respect of the same acts in a Member State, thereby precluding further legal proceedings'.[42] Finally Article 7 (2)(h) permits recognition and enforcement to be refused where a limitation period, applying either to the issuing or the execution of a confiscation order, has expired in the executing State.[43]
    10. Article 8 provides for the legal remedies available to an interested party against a confiscation order. These remedies are to have the effect of superseding the order, but the 'substantial reasons' for issuing the confiscation order may be challenged only in the courts of the issuing State. The executing State is to be required to take the necessary measures to hold the property while the application is being considered.
    11. Article 9 allows for postponement of execution where a legal challenge against execution has been made under Article 8, where execution might damage an ongoing criminal investigation, or where it is considered necessary to have parts of the order translated.
    12. Article 10 establishes a procedure to deal with multiple requests for confiscation.
    13. Article 11 provides that the law of the executing state shall determine the procedures and measures for execution of a confiscation order issued in another Member State. Article 11 (5) provides that the executing State may not impose imprisonment as an alternative in response to a request under Article 4, unless the issuing State has given its consent to this in the request.
    14. Article 12 (1) provides that an amnesty or pardon may be granted both by the issuing state and also by the executing state. Article 12(2) provides that only the courts of the issuing state may decide on an application for review of the order.[44]
    15. Articles 13 to 20 deal with incidental matters ranging from conditions for termination of the order to the return of surplus proceeds resulting from execution of a confiscation order, questions of translation and the provision of certain information in conjunction with execution of the order.
    16. Article 19 states that the Framework Decision is due to be implemented throughout the EU by 30 June 2004.
    17. The Government's view

    18. In his Explanatory Memorandum of 31 July 2002 the Parliamentary Under-Secretary of State (Anti-drugs Co-ordination and Organised Crime), Home Office (Mr Bob Ainsworth) states the Government's support for the central principle of this initiative, namely, to insure the speedy recognition and enforcement of confiscation orders throughout the EU as a means of swiftly depriving convicted offenders of criminal gains. He emphasises, however, that since the proposed measure concerns "a final decision which results in the deprivation of property from an individual", the Government will ensure that any legislative arrangements finally agreed to will include "adequate safeguards and protection for individual rights".
    19. With reference to Article 2 the Minister notes that the definition of property in the draft framework decision "omits the instrumentalities of an offence as was included in the framework decision on orders freezing property and evidence." The Minister states that "the government considers that if instrumentalities may be subject to provisional freezing, then provision for their forfeiture should also be provided in this instrument", an extension of scope for the draft decision for which the Government expects "widespread support in the working group."
    20. In relation to the proposed central authority for the execution of confiscation orders proposed under Article 3 (3) the Minister states that
    21. "The UK considers, similar to its position on the framework decision on orders freezing property and evidence, that use of the central authority to receive orders, undertake some initial checks, before passing on to the appropriate authority to make an application for recognition, will facilitate the speedy recognition and enforcement of these orders. The Government notes that this text does not contain provisions for any later declaration to limit the role of central authorities as included in the framework decision on orders freezing property and evidence."

    22. In relation to both Articles 3 and 4 the Minister notes that the Government will seek to ensure consistency of language in the use of the terms "competent authority" and "judicial authority". The Minister notes that, under Article 3 (1), it is to be a court which is responsible for issuing a confiscation order.
    23. Regarding Article 5 the Minister states that the Government will seek clarification of the term "smuggling of human beings", which is one of the offences included within the scope of the draft decision. Otherwise the Minister is content with the text in its present form.
    24. In relation to Article 6 (2), the Minister notes that this provision allows the parties to agree that confiscation may take the form of a requirement to pay a sum of money equivalent to the value of the property. He comments that a UK confiscation order is always a value-based order and indicates that the Government will seek to discuss the point further in the working group.
    25. In relation to Article 7 the Minister states that the Government will be seeking further clarification of some of the reasons for non-recognition or non-execution of confiscation orders by an executing state. In particular the Government questions the need for Article 7 (g) which refers to legal proceedings which the executing state could be considering instituting. The Minister also questions how an executing State could invoke a limitation period under Article 7 (h).
    26. In relation to Article 8, which deals with legal remedies against a confiscation order, the Minister expresses concern about the practical implications of the draft decision, particularly in cases where the assets in question are not subject to prior restraint, and indicates that he will seek to explore these with the Presidency.
    27. In relation to the various grounds for postponement of execution under Article 9, the Minister notes that the Government will seek further explanation of these circumstances where execution of a confiscation order might damage an ongoing criminal investigation. In addition, the Government will seek to discuss a ground for postponement[45] where the assets are already the subject of a freezing order, or an order made in the course of other proceedings in the executing State.
    28. The Minister doubts the 'overall practical value' of Article 10 since it does not specify how competing requests for confiscation are to be dealt with.
    29. In relation to Article 11 the Minister comments that the provision in Article 11 (5), which specifies that a custodial sentence may not be imposed on an individual as an alternative to execution of an order, "would seem an irrelevant provision in relation to UK legislation" as the courts in this country "would have no powers to substitute a sentence of imprisonment in place of enforcing a foreign confiscation order." The Government will pursue this matter in negotiations.
    30. The Minister states that the Government will seek to explore and clarify further the provisions under Article 12 which allow for the granting of an amnesty or a pardon by both the executing and the issuing state. He adds that an explanation for the precise meaning and effect of the proposed text will be sought from the Presidency in the negotiations.
    31. Finally, in relation to Articles 13 - 20 the Minister states the Government's broad agreement.
    32. Conclusion

    33. We welcome the provision that confiscation orders covered by this proposal may be made only by courts.
    34. We share the Government's concerns about the precise wording and likely effect of many of the provisions of the draft text of the proposed measure and look forward in particular to receiving, in due course, further information in relation to the requests for clarification which the Government will be making.
    35. We shall need to review the measure in detail in the light of this information, but we raise a number of concerns of our own at this stage. First, we ask the Minister to explain more fully the scope and purpose of Article 7(2)(g), and if he accepts that a previous criminal conviction should operate as a bar to subsequent confiscation proceedings in another Member State. Secondly, in relation to Article 11(5), we ask the Minister if this provision has the effect of requiring a sentence of imprisonment to be imposed if the issuing State so requests. Thirdly, in relation to Article 12 (2), we ask the Minister to explain the relationship of this provision with Article 8 (2) and to confirm that the remedies under Article 8 are also to be available to the defendant in the original criminal proceedings.
    36. In relation to Article 12 we ask the Minister if the possibility of such an amnesty or pardon runs counter to the basic principle of the draft Framework Decision, namely, that of mutual recognition of decisions in criminal matters.
    37. We shall hold the document under scrutiny until we have received the Minister's reply.

 


37  'Dual or 'double' criminality is the principle derived from the law of extradition that the conduct in question should be criminal in both the State where the order is issued and the State in which enforcement is sought. Back

38  The 'parties' are, presumably, the competent authorities rather than the parties to the original criminal proceedings. Back

39  This would seem to include non-EU Member States. Back

40  It is not clear from this information that there is to be a right of appeal in all cases. Back

41  The text does not explain the grounds on which such a decision may be reached. It would seem to include the case where the evidence in the executing State is insufficient, but where such evidence is available and admissible in the issuing State. Back

42  The effect of this is far from clear. The case of competing confiscation orders is already dealt with in Article 7(2)(a), and it is not obvious why earlier criminal proceedings in a Member State should preclude confiscation proceedings in other Member States based on the conviction obtained in those earlier proceedings. This does not seem consistent with a principle of mutual recognition. Back

43  Application of the executing State's periods of limitation with respect to execution is consistent with the principle that execution is governed by the law of the executing State (Article 11(1)). It is less clear why the expiry of a limitation in relation to the issue of a confiscation order in the executing State should affect the enforcement of a foreign order. Back

44  It is not clear why this provision is necessary, in view of the provision made in Article 8(2). It is not clear if the implication is that the remedies under Article 8 are to be made available only to third parties, and not the defendant in the criminal proceedings. Back

45  Article 7(2)(a) provides for recognition and enforcement to be refused in such cases, but not expressly for postponement. Back

 
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